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THE VOLKSWAGEN SCANDAL: PART II

By Allen L Phillips

After initial denials the Volkswagen Group has now admitted that, in addition to 2.0 Liter diesels, the 3.0 liter diesel engines found in some luxury models sold by Audi and Porsche also contain software to defeat emissions tests.  That, and the fact that some gasoline powered cars were found to not meet the manufacturer's specifications for carbon dioxide (CO2) emissions in Europe, makes one wonder where this is all going.  (If you haven't yet, be sure to read my previous article about the Volkswagen scandal so this will make more sense.)

My research found a New York Times article (Nov. 11), written in London, comparing the U.S. system of emission controls to that of Europe.  Here are some highlights.

There is no equivalent to our Environmental Protection Agency (EPA) for the European Union (EU).  Each of the 28 member states has its own agency and, while periodic meetings are held with the other EU agencies to try to standardize rules, there is much yet to be done and not all that has been done is good.  One such agreement, for example, is that if a new vehicle is approved by one member state, the rest must accept it.  There is concern that this leads manufacturers to chose the member state agency to test a new model who will be "easiest to work with".

Cars in Europe typically have default, sport and eco (economy) settings.  Emissions testing is done by independent contractors taking direction from the car makers who specify how the testing is to be conducted.  The manufacturers can (and do) specify that testing be done in the eco setting which results in lower emissions than if tested in the sport setting.

Several years ago Britain proposed that all EU testing be done in the default setting or the setting which would produce the worst emissions.  While most regulators appeared to support the idea it never came to a vote.  Critics suggest that policy makers are frustrated by powerful member states like Germany protecting domestic automakers. 

In the current lax EU environment the "defeat device" installed in vehicles with diesel engines, loudly denounced by the EPA, may not even be illegal.  What's the difference between having software that reduces emissions during a test and specifying that tests be conducted in eco setting to reduce emissions.  Any penalties for use of the devices by carmakers will be left to member states in the EU and enforcement by auto regulators in the past has been rare.

Gerben-Jan Gerbrandy, a Dutch member of the European Parliament, summed it up nicely:  "What we have developed is a phony system of testing where the member states are in competition with each other for who can make it the most easy for the car manufacturers to pass the test".  He then went on to lament that European governments do not conduct random testing of their own, as the EPA does. 

But does the EPA conduct random testing?  Remember how the Volkswagen diesel problem first came to light - independent testing by a non-profit (see previous article).  In light of those findings the EPA is now doing random testing, largely through a cooperative effort with the California Air Resources Board (CARB) at facilities in El Monte, California.  That's how the 3.0 liter diesel problem was discovered which, due to ongoing testing and admissions by VW, has now expanded well beyond the previously announced 10,000 to 75,000 vehicles.

Volkswagen has announced a "quick fix" for cars in the EU which they say can be completed by the end of 2016.  The U.S. has more strict limits on nitrous oxides (NOx) and VW and the EPA are in discussions regarding a solution.  While no details have been released, information has leaked that the fix will require both hardware and software changes that may require as much as 10 hours per car to complete.  Given that some 500,000 cars in the U.S. are involved, assuming all owners bring them in to be fixed (see prior article), the time involved will be measured in years, not months, and the cost to VW will be substantial.

Twenty of the 28 member states in the EU assess a vehicle registration tax which is based on the manufacturers stated CO2 emissions and they will be watching closely to see how the EU "fix" affects those emissions.  If the end result is that CO2 emissions are still higher than originally specified, for the problematic gasoline powered cars, those states will want the higher tax and current owners won't want to pay it.  Ah, the tangled web we weave.

It's become quite apparent that there is a problem in the corporate culture of the Volkswagen Group, a company that has placed status (being the biggest automobile company in the world) above integrity.   But given the enforcement laxity in the EU, I wonder if this disease could have infected other European manufacturers.  Is it possible that the same cultural mindset exists in other German car makers such as BMW and Daimler-Benz (Mercedes) who, along with VW are coddled (protected) by the German government? 

According to a recent report, Germany's KBA (the equivalent of our EPA) has began its own testing of up to 50 diesel models from other car makers including Ford and General Motors.  And you can bet that the EPA and California will be doing more random testing. 

Don't change that dial.  More shoes are going to drop.

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